New twist after Supreme Court decision in Behn

**Update: The BC Supreme Court’s finding about the Province of BC’s liability were overturned on appeal at the BC Court of Appeal. See 2015 BCCA 89 for more details.

In May 2013, the Supreme Court issued a short decision in a case known as Behn v Moulton Contracting. Usually a pronouncement from the Supreme Court means a legal case has reached its final resting point, but this case was not over – the Supreme Court dealt only with a procedural issue. Just before Christmas, the BC Supreme Court decided on the merits of the case, adding some new twists and some food for thought about the Crown’s duty to consult and accommodate Aboriginal peoples. The Province of BC was held to have breached its duties to consult and accommodate the First Nation in this logging dispute. In addition, the court made some interesting comments about the Crown’s obligations to companies when consultation is at issue.

The Behn case involves a lawsuit brought by Moulton Contracting, a logging company. Moulton was blocked from accessing a logging area by the Behn family, who are the trapline holders in that area and members of Fort Nelson First Nation. The First Nation had previously complained to the Province about lack of consultation, including lack of funding to support that consultation, but nothing came of it. After the Province issued Moulton’s logging permit, the Behn family told the Province that they remained concerned about consultation and intended to try to stop the logging. The Province did not act to resolve the consultation issue, nor did it inform Moulton. After Moulton was prevented from accessing the logging area, Moulton brought the lawsuit. They sued the Province for breach of contract and negligent misrepresentation, and they sued the Behns and their First Nation for the tort of intentional interference with economic interests and a related “conspiracy” between them.

The procedural issue that went to the Supreme Court was a motion brought by Moulton to strike out parts of the Behn family’s statement of defence. Moulton won that motion. The Behns’ statement of defence said that Moulton’s logging licence was void, because it was issued in violation of the Crown’s duty to consult and accommodate Aboriginal peoples and therefore was contrary to their aboriginal and treaty rights guaranteed under s. 35 of the Constitution. The Supreme Court held that it was too late for the Behns to argue that. To find the licence void, they or the First Nation would have had to bring a judicial review application immediately when the licence was issued. Given that they did not, the Supreme Court held it was an abuse of process for the Behns’ statement of defence to say now, as a defence, that the licence was void. The Supreme Court did not want to be seen condoning what it saw as the “self-help remedies” undertaken by the Behns in their blockade.

Meanwhile, the case proceeded to trial in the BC Supreme Court. After the Supreme Court released its decision on the motion, Justice Saunders made his decision on the merits of Moulton’s case as a whole. Justice Saunders found the Province liable to Moulton for $1.75 million, and dismissed Moulton’s case against the Behns and the First Nation. The main reason the court found BC liable was because the court said it should have at least told Moulton about the continuing conflict – information of “fundamental relevance” to Moulton’s licence and related contract with the Province.

One of the more interesting twists is that even though the Supreme Court said the duty to consult was an inappropriate defencefor the Behns, Justice Saunders found that it was relevant to Moulton’s claim against the Province. The BC court held that resource agreements between companies and the Crown, like this logging licence, have an “implied consultation promise” from the Crown to the company. At para. 290, the court held:

The need to engage in meaningful consultation with aboriginal groups is fundamental to questions of land use in territory covered by Treaty 8. If adequate consultation were not to take place, the legitimacy of the “taking up” under the Treaty would stand to be challenged, and a party given license by the Crown to use land would inevitably run the risk of conflict. The Crown must be taken to be aware of this risk in any given situation, and a party engaging in negotiations with the Crown for license to use Crown land must be entitled to assume that the Crown has taken adequate steps to discharge its obligation. The commercial reality of dealing with land subject to aboriginal claims justifies and necessitates such expectations being recognized as forming implied terms of a contract with the Crown[.]

When Justice Saunders looked at what happened with consultation, he found that the Province had in fact failed to meet its constitutional duties to the First Nation and its members, including the Behns. Unfortunately, it appears that the Aboriginal parties are left without a remedy for that breach. While the company has been awarded damages, the Behns and the First Nation are left empty handed, and (as far as we know) still dealing with the reality of Moulton’s logging licence. Perhaps this long saga is still not yet over…